Stock in the Spotlight: Tenet Healthcare Corporation (NYSE: THC)

Tomas Palumbo

I am Tomas Palumbo and I’m passionate about business and finance news with over 4 years in the industry starting as a writer working my way up into senior positions.

I am the driving force behind Up 24 News with a vision to broaden the company’s readership throughout 2016. I am an editor and reporter of “Healthcare” category.

Address: 1134 Russell Street, Cambridge, MA 02141, USA
Phone: (+1) 978-923-6667
Email: tomas.palumbo@up24news.com
Tomas Palumbo

DALLAS, July 14, 2019 – Shares of Tenet Healthcare Corporation (NYSE: THC) inclined 1.83% to $19.48. The stock grabbed the investor’s attention and traded 1.169M shares as compared to its average daily volume of 1.68M shares.

Tenet Healthcare Corporation (THC) reported a net loss from continuing operations attributable to Tenet common shareholders of $27.0M in the first quarter of 2019 contrast to net income of $98.0M in the first quarter of 2018. Adjusted EBITDA was $613.0M in the first quarter of 2019 above the midpoint of the Company’s Outlook range of $575.0M to $625.0M.

Results for the Quarter Ended March 31, 2019:

Adjusted EBITDA was $613.0M in the first quarter of 2019 contrast to $665.0M in the first quarter of 2018. The decline was mainly attributable to: (i) a $38.0M increase in malpractice expense; (ii) $11.0M of losses generated by a risk-based contracting business in California in the first quarter of 2019; (iii) $7.0M because of the divestiture of Aspen Healthcare, the Company’s former operations in the United Kingdom; and (iv) $10.0M of contract termination fees received by Conifer in the first quarter of 2018 which did not occur again in the first quarter of 2019. These four items were substantially anticipated in the Company’s Outlook range offered in February.

Net Income and Earnings Per Share:

Tenet reported a net loss from continuing operations attributable to Tenet common shareholders of $27.0M, or $0.26 per diluted share, in the first quarter of 2019 contrast to net income of $98.0M, or $0.95 per diluted share, in the first quarter of 2018. The net loss in the first quarter of 2019 included a $47.0M pre-tax loss from the early extinguishment of debt; net income in the first quarter of 2018 included $110.0M of pre-tax gains on sales, consolidation and deconsolidation of facilities, mainly comprised of a $98.0M gain from the sale of MacNeal Hospital and other operations associated with the hospital and a gain of $13.0M from the sales of the Company’s minority interests in four North Texas hospitals.

Cash Flow and Liquidity:

Cash and cash equivalents were $252.0M at March 31, 2019 contrast to $411.0M at December 31, 2018. The Company had $190.0M of outstanding borrowings on its $1.0B credit line as of March 31, 2019. Accounts receivable days outstanding from continuing operations were 58.6 at March 31, 2019 contrast to 56.5 at December 31, 2018.

Net cash offered by operating activities was $10.0M in the first quarter of 2019, representing a $103.0M decrease contrast to $113.0M in the first quarter of 2018. After subtracting $192.0M and $143.0M of capital expenditures in the first quarters of 2019 and 2018, respectively, Free Cash Flow was an outflow of $182.0M in the first quarter of 2019, a decrease of $152.0M contrast to an outflow of $30.0M in the first quarter of 2018. Adjusted Free Cash Flow was an outflow of $148.0M in the first quarter of 2019, representing a $152.0M decrease from an inflow of $4.0M in the first quarter of 2018.

Net cash used in investing activities was $139.0M in the first quarter of 2019 contrast to $373.0M of net cash offered by investing activities in the first quarter of 2018. Results in the first quarter of 2019 included $62.0M of proceeds from the sales of facilities, long-term investments and other assets contrast to $559.0M in the first quarter of 2018.

Net cash used in financing activities was $30.0M in the first quarter of 2019 contrast to $123.0M used in the first quarter of 2018.

Outlook:

The Company’s Outlook for 2019 includes:

  • Revenue of $18.00B to $18.40B,
  • Net income from continuing operations available to Tenet common shareholders of $17.0M to $117.0M,
  • Adjusted EBITDA of $2.650B to $2.750B,
  • Net cash offered by operating activities of $1.070B to $1.375B,
  • Adjusted Free Cash Flow of $600.0M to $800.0M.

THC has a market value of $2.00B while its EPS was booked as $-0.17 in the last 12 months. The stock has 102.43M shares outstanding. In the profitability analysis, the company has gross profit margin of 83.60% while net profit margin was 0.00%. Beta value of the company was 1.63; beta is used to measure riskiness of the security. Analyst recommendation for this stock stands at 2.80.

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Tomas Palumbo

I am Tomas Palumbo and I’m passionate about business and finance news with over 4 years in the industry starting as a writer working my way up into senior positions. I am the driving force behind Up 24 News with a vision to broaden the company’s readership throughout 2016. I am an editor and reporter of “Healthcare” category. Address: 1134 Russell Street, Cambridge, MA 02141, USA Phone: (+1) 978-923-6667 Email: tomas.palumbo@up24news.com

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